Nest, the £55bn pension scheme, and the largest UK fund by the number of members, has invested a further £500m into a private equity mandate provided Schroders Capital, the private markets business of Schroders.
Schroders Capital’s mandate is to invest in both established and young businesses at the forefront of innovation, in growth sectors such as artificial intelligence, healthcare, pharmaceuticals and technology across North America, Asia and Europe, including the UK.
Across its portfolio, Nest has around £2bn directly invested in unlisted equity, of which nearly all is invested through its default funds, and around 18% (£381m) is to UK companies.
“Private equity deals offer exciting investment opportunities for our members. It’s right that they’re no longer out-of-reach of the average UK worker but a key component of their Nest pension,” said Rachel Farrell, director of public and private markets at Nest Invest
“We want to keep growing our investment into this high-performing asset class,” Farrell added. “This supports our overall ambition – to expand our private market allocation to 30% assets under management by 2030.”
The allocation strengthens the partnership between the two, which began in 2022, and brings Nest’s total committed capital to Schroders Capital’s private equity strategy to £1.5bn.
Institutional investors, like Nest, are increasingly turning to private markets to access attractive return and income opportunities, as highlighted within Schroders’ latest Global Investor Insights Survey.
Across both public and private markets, private equity was selected as the most favoured asset class for return opportunities among institutional investors.
With this, smaller, innovative and domestically focused companies that are inaccessible via public markets can be less exposed to global trade disruptions and geopolitical tensions, and therefore, have the potential to also enhance portfolio resilience – a particularly pertinent factor in today’s market context.
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